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THE ELECTRICITY ACT, 2003

[No. 36 OF 2003]

An Act to consolidate the laws relating to generation, transmission, distribution,

trading and use of electricity and generally for taking measures conducive to

development of electricity industry, promoting competition therein, protecting

interest of consumers and supply of electricity to all areas, rationalisation of

electricity tariff, ensuring transparent policies regarding subsidies, promotion of

efficient and environmentally benign policies constitution of Central Electricity

Authority, Regulatory Commissions and establishment of Appellate Tribunal

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Short title, extentand

commencement

Definitions

and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in the Fifty- fourth Year of the Republic of India as

follows: -

PART I

PRELIMINARY

1. (1) This Act may be called the Electricity Act, 2003.

(2) It extends to the whole of India except the State of Jammu and

Kashmir.

(3) It shall come into force on such date as the Central Government may,

by notification, appoint:

Provided that different dates may be appointed for different provisions of this

Act and any reference in any such provision to the commencement of this Act shall

be construed as a reference to the coming into force of that provision.

2. In this Act, unless the context otherwise requires,

(1) Appellate Tribunal means the Appellate Tribunal for Electricityestablished under section 110;

(2) "appointed date" means such date as the Central Government may, by

notification, appoint;

(3) "area of supply means the area within which a distribution licensee is

authorised by his licence to supply electricity;

(4) "Appropriate Commission means the Central Regulatory Commission

referred to in sub-section (1) of section 76 or the State Regulatory

Commission referred to in section 82 or the Joint Commission referred to in

section 83, as the case may be ;

(5) "Appropriate Government" means, -

(a) the Central Government, -(i) in respect of a generating company wholly or partly

owned by it;

(ii) in relation to any inter-State generation, transmission,

trading or supply of electricity and with respect to any

mines, oil-fields, railways, national highways, airports,

telegraphs, broadcasting stations and any works of

defence, dockyard, nuclear power installations;

(iii) in respect of National Load Despatch Centre; and

Regional Load Despatch Centre;

(iv) in relation to any works or electric installation belonging

to it or under its control ;

(b) in any other case, the State Government, having jurisdiction

under this Act;

(6) Authority means the Central Electricity Authority referred to in

sub-section(1) of section 70;

(7) "Board" means, a State Electricity Board, constituted before the

-

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commencement of this Act, under sub-section (I) of section 5 of the

Electricity (Supply) Act, 1948;

(8) Captive generating plant means a power plant set up by any person

to generate electricity primarily for his own use and includes a power

plant set up by any co-operative society or association of persons for

generating electricity primarily for use of members of such co-

operative society or association;

(9) "Central Commission" means the Central Electricity RegulatoryCommission referred to in sub-section (1) of section 76;

(10) "Central Transmission Utility" means any Government company

which the Central Government may notify under sub-section (1) of

section 38;

(11) " Chairperson" means the Chairperson of the Authority or Appropriate

Commission or the Appellate Tribunal as the case may be;

(12) Cogeneration means a process which simultaneously produces two

or more forms of useful energy (including electricity);

(13) "company" means a company formed and registered under the

Companies Act, 1956 and includes any body corporate under a Central,State or Provincial Act;

(14) "conservation" means any reduction in consumption of electricity as a

result of increase in the efficiency in supply and use of electricity;

(15) "consumer" means any person who is supplied with electricity for his

own use by a licensee or the Government or by any other person

engaged in the business of supplying electricity to the public under

this Act or any other law for the time being in force and includes any

person whose premises are for the time being connected for the

purpose of receiving electricity with the works of a licensee, the

Government or such other person, as the case may be;

(16) " Dedicated Transmission Lines " means any electric supply line forpoint to point transmission which are required for the purpose of

connecting electric lines or electric plants of a captive generating plantreferred to in section 9 or generating station referred to in section 10 to

any transmission lines or sub-stations or generating stations or the load

centre, as the case may be;

(17) "distribution licensee" means a licensee authorised to operate and

maintain a distribution system for supplying electricity to the

consumers in his area of supply;

(18) "distributing main" means the portion of any main with which a

service line is, or is intended to be, immediately connected;

(19) "distribution system" means the system of wires and associatedfacilities between the delivery points on the transmission lines or the

generating station connection and the point of connection to the

installation of the consumers;

(20) "electric line" means any line which is used for carrying electricity for

any purpose and includes

(a) any support for any such line, that is to say, any structure, tower,

pole or other thing in, on, by or from which any such line is, or

may be, supported, carried or suspended; and

1 of 1956

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(b) any apparatus connected to any such line for the purpose of

carrying electricity;

(21) "Electrical Inspector" means a person appointed as such by the

Appropriate Government under sub-section (1) of section 162 and also

includes Chief Electrical Inspector;

(22) "electrical plant" means any plant, equipment, apparatus or appliance or

any part thereof used for, or connected with, the generation,transmission, distribution or supply of electricity but does not include-

(a) an electric line; or

(b) a meter used for ascertaining the quantity of electricity supplied to

any premises; or

(c) an electrical equipment, apparatus or appliance under the control

of a consumer;

(23) "electricity" means electrical energy-

(a) generated, transmitted, supplied or traded for any purpose; or

(b) used for any purpose except the transmission of a message;

1 of 1956

(24) "Electricity Supply Code" means the Electricity Supply Code specified

under section 50;

(25) "electricity system means a system under the control of a generating

company or licensee, as the case may be, having one or more -

(a) generating stations; or

(b) transmission lines; or

(c) electric lines and sub-stations;

and when used in the context of a State or the Union, the entire

electricity system within the territories thereof;

(26) "electricity trader" means a person who has been granted a licence to

undertake trading in electricity under section 12;

(27) franchisee means a persons authorised by a distribution licensee to

distribute electricity on its behalf in a particular area within his area

of supply;

(28) "generating company" means any company or body corporate or

association or body of individuals, whether incorporated or not, or

artificial juridical person, which owns or operates or maintains a

generating station;

(29) "generate" means to produce electricity from a generating station for

the purpose of giving supply to any premises or enabling a supply to

be so given;

(30) "generating station" or station means any station for generating

electricity, including any building and plant with step-up transformer,

switch yard, switch-gear, cables or other appurtenant equipment, if

any used for that purpose and the site thereof, a site intended to be used

for a generating station, and any building used for housing the

o eratin staff of a eneratin station, and where electricit is

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operating staff of a generating station, and where electricity is

generated by water-power, includes penstocks, head and tail works,

main and regulating reservoirs, dams and other hydraulic works, but

does not in any case include any sub-station;

(31) Government company shall have the meaning assigned to it in

section 617 of the Companies Act, 1956;

(32) "grid" means the high voltage backbone system of inter-connected

transmission lines, sub-stations and generating plants;

(33) "Grid Code" means the Grid Code specified by the Central Commission

under clause (h) of sub-station (1) of section 79;

(34) "Grid Standards" means the Grid Standards specified under clause (d)

of section 73 by the Authority;

(35) "high voltage line means an electric line or cable of a nominal

voltage as may be specified by the Authority from time to time;

(36) inter-State transmission system includes -

(i) any system for the conveyance of electricity by means of main

transmission line from the territory of one State to another State;

(ii) the conveyance of electricity across the territory of an intervening

State as well as conveyance within the State which is incidental to

such inter-State transmission of electricity;

(iii) the transmission of electricity within the territory of a State on a

system built, owned, operated, maintained or controlled by Central

Transmission Utility.

(37) intra -State transmission system means any system for

transmission of electricity other than an inter-State transmission

system ;

(38) licence means a licence granted under section 14;

(39) licensee means a person who has been granted a licence under

section 14;

(40) line means any wire, cable, tube , pipe, insulator, conductor or

other similar thing (including its casing or coating) which is

designed or adapted for use in carrying electricity and includes any

line which surrounds or supports, or is surrounded or supported by

or is installed in close proximity to, or is supported, carried or

suspended in association with, any such line;

(41) local authority means any Nagar Panchayat, Municipal Council,

municipal corporation, panchayat constituted at the village,

intermediate and district levels, body or port commissioners or other

authority legally entitled to, or entrusted by the Union or any State

Government with, the control or management of any area or local

fund;

(42) "main means any electric supply-``` line through which electricity is,

or is intended to be, supplied ;

(43) "Member" means the Member of the Appropriate Commission or

Authority or Joint Commission, or the Appellate Tribunal, as the case

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may be, and includes the Chairperson of such Commission or

Authority or appellate tribunal;

(44) "National Electricity Plan" means the National Electricity Plan notified

under sub-section (4) of section 3;

(45) National Load Despatch Centre means the Centre established under

sub-section (1) of section 26;

(46) notification means notification published in the Official Gazette andthe expression notify shall be construed accordingly;

(47) open access means the non-discriminatory provision for the use of

transmission lines or distribution system or associated facilities with

such lines or system by any licensee or consumer or a person engaged

in generation in accordance with the regulations specified by the

Appropriate Commission;

(48) overhead line means an electric line which is placed above the ground

and in the open air but does not include live rails of a traction system;

(49) person shall include any company or body corporate or association or

body of individuals, whether incorporated or not, or artificial juridical

person;

(50) "power system" means all aspects of generation, transmission,

distribution and supply of electricity and includes one or more of the

following, namely:-

(a) generating stations;

(b) transmission or main transmission lines;

(c) sub-stations;

(d) tie-lines;

(e) load despatch activities;

(f) mains or distribution mains;

(g) electric supply-lines;

(h) overhead lines;

(i) service lines;(j) works;

(51) premises includes any land, building or structure;

(52) prescribed means prescribed by rules made by the Appropriate

Government under this Act;

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(53) "public lamp" means an electric lamp used for the lighting of any street;

(54) "real time operation" means action to be taken at a given time at which

information about the electricity system is made available to the

concerned Load Despatch Centre;

(55) Regional Power Committee means a committee established by

resolution by the Central Government for a specified region for

facilitating the integrated operation of the power systems in that region;

(56) "Regional Load Despatch Centre" means the centre established under

sub-section (1) of section 27;

(57) "regulations" means regulations made under this Act;

(58) repealed laws means the Indian Electricity Act, 1910, the Electricity

(Supply) Act, 1948 and the Electricity Regulatory Commissions Act,

1998 repealed by section 185;

(59) "rules " means rules made under this Act;

(60) schedule means the schedule to this Act;

(61) "service-line" means any electric supply line through which electricity

is, or is intended to be,supplied -

(a) to a single consumer either from a distributing main or immediately

from the Distribution Licensee's premises; or

(b) from a distributing main to a group of consumers on the same

premises or on contiguous premises supplied from the same point of

the distributing main;

(62) "specified" means specified by regulations made by the Appropriate

Commission or the Authority, as the case may be, under this Act;

(63) stand alone system means the electricity system set up to generate

power and distribute electricity in a specified area without connection to

the grid;

(64) "State Commission" means the State Electricity Regulatory Commission

constituted under sub-section (1) of section 82 and includes a Joint

Commission constituted under sub-section (1) of section 83;

(65) "State Grid Code" means the State Grid Code referred under clause (h) of

sub-section (1) of section 86;

(66) "State Load Despatch Centre" means the centre established under sub-

section (1) of section 31;

(67) "State Transmission Utility" means the Board or the Government

company specified as such by the State Government under sub-section (1)

of section 39;

(68) "street" includes any way, road, lane, square, court, alley, passage or open

space, whether a thoroughfare or not, over which the public have a right of

way, and also the roadway and footway over any public bridge or

causeway;

(69) "sub-station" means a station for transforming or converting electricity for

the transmission or distribution thereof and includes transformers,

9 of 1910

54 of 1948

14 of 1998

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converters, switchgears, capacitors, synchronous condensers, structures,

cable and other appurtenant equipment and any buildings used for that

purpose and the site thereof;

(70) "supply", in relation to electricity, means the sale of electricity to a licensee

or consumer;

(71) "trading" means purchase of electricity for resale thereof and the

expression "trade" shall be construed accordingly;

(72) transmission lines" means all high pressure cables and overhead lines

(not being an essential part of the distribution system of a licensee)

transmitting electricity from a generating station to another generating

station or a sub-station, together with any step-up and step-down

transformers, switch-gear and other works necessary to and used for the

control of such cables or overhead lines, and such buildings or part

thereof as may be required to accommodate such transformers, switch-

gear and other works;

(73) "transmission licensee means a licensee authorised to establish or

operate transmission lines;

(74) "transmit" means conveyance of electricity by means of transmission lines

and the expression "transmission" shall be construed accordingly;

(75) "utility" means the electric lines or electrical plant, and includes all lands,

buildings, works and materials attached thereto belonging to any person

acting as a generating company or licensee under the provisions of this

Act;

(76) "wheeling" means the operation whereby the distribution system and

associated facilities of a transmission licensee or distribution licensee, as

the case may be, are used by another person for the conveyance of

electricity on payment of charges to be determined under section 62;

(77) "works" includes electric line, and any building, plant, machinery,

apparatus and any other thing of whatever description required to transmit,

distribute or supply electricity to the public and to carry into effect theobjects of a licence or sanction granted under this Act or any other law for

the time being in force.

NationalElectricity Policy

and Plan

PART II

NATIONAL ELECTRICITY POLICY AND PLAN

3. (1) The Central Government shall, from time to time, prepare the national

electricity policy and tariff policy, in consultation with the State Governments and

the Authority for development of the power system based on optimal utilisation of

resources such as coal, natural gas, nuclear substances or materials, hydro and

renewable sources of energy.

(2) The Central Government shall publish National Electricity Policy

and tariff policy from time to time.

(3) The Central Government may, from time to time, in consultation

with the State Governments and the Authority, review or revise, the National

Electricity Policy and tariff policy referred to in sub-section (1) .

(4) The Authority shall prepare a National Electricity Plan in

accordance with the National Electricity Policy and notify such plan once in five

years:

.

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National policy

on stand alonesystems for

rural areas andnon-

conventional

energy systems.

National policy

onelectrification

and local

distribution in

rural areas.

Obligations to

supply electricity

to rural areas.

GeneratingCompany and

requirement forsetting up of

generatingstation

Hydro-electric

generation

Provided that the Authority in preparing the National Electricity

Plan shall publish the draft National Electricity Plan and invite suggestions and

objections thereon from licensees, generating companies and the public within such

time as may be prescribed:

Provided further that the Authority shall -

(a) notify the plan after obtaining the approval of the Central Government;

(b) revise the plan incorporating therein the directions, if any, given by the

Central Government while granting approval under clause (a).

(5) The Authority may review or revise the National Electricity Plan in

accordance with the National Electricity Policy.

4. The Central Government shall, after consultation with the State

Governments, prepare and notify a national policy, permitting stand alone systems

(including those based on renewable sources of energy and non-conventional

sources of energy ) for rural areas.

5. The Central Government shall also formulate a national policy, in consultation

with the State Governments and the State Commissions, for rural electrification

and for bulk purchase of power and management of local distribution in rural areas

through Panchayat Institutions, users associations, co-operative socities, non-

Governmental organisations or franchisees.

6. The Appropriate Government shall endeavour to supply electricity toall areas including villages and hamlets.

PART III

GENERATION OF ELECTRICITY

7. Any generating company may establish, operate and maintain a generating

station without obtaining a licence under this Act if it complies with the technical

standards relating to connectivity with the grid referred to in clause (b) of

section 73.

8. (1) Notwithstanding anything contained in section 7, any generating company

intending to set-up a hydro-generating station shall prepare and submit to the

Authority for its concurrence, a scheme estimated to involve a capital expenditure

exceeding such sum, as may be fixed by the Central Government, from time to

time, by notification.

(2) The Authority shall, before concurring in any scheme

submitted to it under sub-section (1) have particular regard to, whether or not in

its opinion,-

(a) the proposed river-works will prejudice the prospects for the best

ultimate development of the river or its tributaries for power generation, consistent

with the requirements of drinking water, irrigation, navigation, flood-control, or

other public purposes, and for this purpose the Authority shall satisfy itself, after

consultation with the State Government, the Central Government, or such other

agencies as it may deem appropriate, that an adequate study has been made of the

optimum location of dams and other river-works;

(b) the proposed scheme meets, the norms regarding dam design

and safety.

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Captive

Generation

Duties of

GeneratingCompanies

Direction togenerating

companies

(3) Where a multi-purpose scheme for the development of any river

in any region is in operation, the State Government and the generating company

shall co-ordinate their activities with the activities of the person responsible for

such scheme in so far as they are inter-related.

9. (1) Notwithstanding anything contained in this Act, a person may

construct, maintain or operate a captive generating plant and dedicated

transmission lines:

Provided that the supply of electricity from the captive generating plantthrough the grid shall be regulated in the same manner as the generating station of

a generating company.

(2) Every person, who has constructed a captive generating plant and

maintains and operates such plant, shall have the right to open access for the

purposes of carrying electricity from his captive generating plant to the

destination of his use:

Provided that such open access shall be subject to availability of

adequate transmission facility and such availability of transmission facility shall

be determined by the Central Transmission Utility or the State Transmission

Utility, as the case may be:

Provided further that any dispute regarding the availability of transmissionfacility shall be adjudicated upon by the Appropriate Commission.

10. (1) Subject to the provisions of this Act, the duties of a generating

company shall be to establish, operate and maintain generating stations, tie-lines,

sub-stations and dedicated transmission lines connected therewith in accordance

with the provisions of this Act or the rules or regulations made thereunder.

(2) A generating company may supply electricity to any licensee in

accordance with this Act and the rules and regulations made thereunder and may,

subject to the regulations made under sub-section (2) of section 42, supply

electricity to any consumer.

(3) Every generating company shall -

(a) submit technical details regarding its generating stations to the

Appropriate Commission and the Authority;

(b) co-ordinate with the Central Transmission Utility or the State

Transmission Utility, as the case may be, for transmission of the

electricity generated by it.

11. (1) The Appropriate Government may specify that a generating

company shall, in extraordinary circumstances operate and maintain any generating

station in accordance with the directions of that Government.

Explanation. - For the purposes of this section, the expression extraordinarycircumstances means circumstances arising out of threat to security of the State,

public order or a natural calamity or such other circumstances arising in the public

interest.

(2) The Appropriate Commission may offset the adverse financial

impact of the directions referred to in sub-section (1) on any generating company

in such manner as it considers appropriate.

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Authorised

persons to

transmit,supply, etc.,

electricity

Power to

exempt

Grant of

Licence

14 of 1948

PART IV

LICENSING

12. No person shall

(a) transmit electricity; or

(b) distribute electricity; or

(c) undertake trading in electricity,

unless he is authorised to do so by a licence issued under section 14, oris exempt under section 13.

13. The Appropriate Commission may, on the recommendations, of the

Appropriate Government, in accordance with the national policy formulated under

section 5 and in public interest, direct, by notification that subject to such

conditions and restrictions, if any, and for such period or periods, as may be

specified in the notification, the provisions of section 12 shall not apply to any local

authority, Panchayat Institution, users association, co-operative societies, non-

governmental organizations, or franchisees:

14. The Appropriate Commission may, on application made to it under

section 15, grant any person licence to any person -

(a) to transmit electricity as a transmission licensee; or

(b) to distribute electricity as a distribution licensee; or

(c) to undertake trading in electricity as an electricity trader,

in any area which may be specified in the licence:

Provided that any person engaged in the business of transmission or

supply of electricity under the provisions of the repealed laws or any Act specified

in the Schedule on or before the appointed date shall be deemed to be a licensee

under this Act for such period as may be stipulated in the licence, clearance or

approval granted to him under the repealed laws or such Act specified in the

Schedule, and the provisions of the repealed laws or such Act specified in the

Schedule in respect of such licence shall apply for a period of one year from the

date of commencement of this Act or such earlier period as may be specified, at

the request of the licensee, by the Appropriate Commission and thereafter the

provisions of this Act shall apply to such business:

Provided further that the Central Transmission Utility or the State

Transmission Utility shall be deemed to be a transmission licensee under this Act:

Provided also that in case an Appropriate Government transmits electricity

or distributes electricity or undertakes trading in electricity, whether before or after

the commencement of this Act, such Government shall be deemed to be a licensee

under this Act, but shall not be required to obtain a licence under this Act:

Provided also that the Damodar Valley Corporation, established under

sub-section (1) of section 3 of the Damodar Valley Corporation Act, 1948, shall be

deemed to be a licensee under this Act but shall not be required to obtain a licence

under this Act and the provisions of the Damodar Valley Corporation Act, 1948, in

so far as they are not inconsistent with the provisions of this Act, shall continue to

apply to that Corporation:

Provided also that the Government company or the company referred to

in sub-section (2) of section 131 of this Act and the company or companies

created in pursuance of the Acts specified in the Schedule, shall be deemed to be a

licensee under this Act:

Provided also that the Appropriate Commission may grant a licence to two

or more persons for distribution of electricity through their own distribution system

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Procedure forGrant of

Licence

within the same area, subject to the conditions that the applicant for grant of licence

within the same area shall, without prejudice to the other conditions or

requirements under this Act, comply with the additional requirements (including

the capital adequacy, credit-worthiness, or code of conduct) as may be prescribed

by the Central Government, and no such applicant who complies with all the

requirements for grant of licence, shall be refused grant of licence on the ground

that there already exists a licensee in the same area for the same purpose:

Provided also that in a case where a distribution licensee proposes to

undertake distribution of electricity for a specified area within his area of supplythrough another person, that person shall not be required to obtain any separate

licence from the concerned State Commission and such distribution licensee shall

be responsible for distribution of electricity in his area of supply:

Provided also that where a person intends to generate and distribute

electricity in a rural area to be notified by the State Government, such person shall

not require any licence for such generation and distribution of electricity, but he

shall comply with the measures which may be specified by the Authority under

section 53:

Provided also that a distribution licensee shall not require a licence to

undertake trading in electricity.

15. (1) Every application under section 14 shall be made in such formand in such manner as may be specified by the Appropriate Commission and shall

be accompanied by such fee as may be prescribed.

(2) Any person who has made an application for grant of licence

shall, within seven days after making such application, publish a notice of his

application with such particulars and in such manner as may be specified and a

licence shall not be granted -

(i) until the objections, if any, received by the Appropriate

Commission in response to publication of the application have been considered

by it:

Provided that no objection shall be so considered unless it is received

before the expiration of thirty days from the date of the publication of such notice

as aforesaid;

(ii) until, in the case of an application for a licence for an area

including the whole or any part of any cantonment, aerodrome, fortress, arsenal,

dockyard or camp or of any building or place in the occupation of the

Government for defence purposes, the Appropriate Commission has ascertained

that there is no objection to the grant of the licence on the part of the Central

Government.

(3) A person intending to act as a transmission licensee shall,

immediately on making the application, forward a copy of such application to the

Central Transmission Utility or the State Transmission Utility, as the case may

be.

(4) The Central Transmission Utility or the State Transmission

Utility, as the case may be, shall, within thirty days after the receipt of the copy of

the application referred to in sub-section (3), send its recommendations, if any, to

the Appropriate Commission:

Provided that such recommendations shall not be binding on the

Commission.

(5) Before granting a licence under section 14, the Appropriate

Commission shall -

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Conditions of

licence.

Licensee not

to do certain

things.

(a) publish a notice in two such daily newspapers, as that

Commission may consider necessary, stating the name of the

person to whom it proposes to issue the licence;

(b) consider all suggestions or objections and the recommendations,

if any, of the Central Transmission Utility or State Transmission

Utility, as the case may be.

(6) Where a person makes an application under sub-section (1) ofsection 14 to act as a licensee, the Appropriate Commission shall, as far as

practicable, within ninety days after receipt of such application, -

(a) issue a licence subject to the provisions of this Act and the rules

and regulations made thereunder; or

(b) reject the application for reasons to be recorded in writing if such

application does not conform to the provisions of this Act or the

rules and regulations made thereunder or the provisions of any

other law for the time being in force:

Provided that no application shall be rejected unless the applicant has

been given an opportunity of being heard.

(7) The Appropriate Commission shall, immediately after issue of

licence, forward a copy of the licence to the Appropriate Government , Authority,

local authority, and to such other person as the Appropriate Commission

considers necessary.

(8) A licence shall continue to be in force for a period of twenty-

five years unless such licence is revoked.

16. The Appropriate Commission may specify any general or specific

conditions which shall apply either to a licensee or class of licensees and such

conditions shall be deemed to be conditions of such licence:

Provided that the Appropriate Commission shall, within one year from

the appointed date, specify any general or specific conditions of licence applicable

to the licensees referred to in the first, second, third, fourth and fifth provisos to

section 14 after the expiry of one year from the commencement of this Act.

17. (1) No licensee shall, without prior approval of the Appropriate

Commission, -

(a) undertake any transaction to acquire by purchase or takeover or

otherwise, the utility of any other licensee; or

(b) merge his utility with the utility of any other licensee:

Provided that nothing contained in this sub-section shall apply if the

utility of the licensee is situate in a State other than the State in which the utility

referred to in clause (a) or clause (b) is situate.

(2) Every licensee shall, before obtaining the approval under sub-

section (1), give not less than one months notice to every other licensee who

transmits or distributes, electricity in the area of such licensee who applies for such

approval.

(3) No licensee shall at any time assign his licence or transfer his

utility, or any part thereof, by sale, lease , exchange or otherwise without the prior

approval of the Appropriate Commission.

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14

Amendment

of licence

(4) Any agreement relating to any transaction specified in sub-

section (1) or sub-section (3), unless made with, the prior approval of the

Appropriate Commission, shall be void.

18. (1) Where in its opinion the public interest so permits, the

Appropriate Commission, may, on the application of the licensee or otherwise,

make such alterations and amendments in the terms and conditions of a licence as it

thinks fit:

Revocation of

licence

Provided that no such alterations or amendments shall be made except

with the consent of the licensee unless such consent has, in the opinion of the

Appropriate Commission, been unreasonably withheld.

(2) Before any alterations or amendments in the licence are made

under this section, the following provisions shall have effect, namely: -

(a) where the licensee has made an application under sub-section (1)

proposing any alteration or modifications in his licence, the

licensee shall publish a notice of such application with such

particulars and in such manner as may be specified;

(b) in the case of an application proposing alterations or

modifications in the area of supply comprising the whole or anypart of any cantonment, aerodrome, fortress, arsenal, dockyard or

camp or of any building or place in the occupation of the

Government for defence purposes, the Appropriate Commission

shall not make any alterations or modifications except with the

consent of the Central Government;

(c) where any alterations or modifications in a licence are proposed

to be made otherwise than on the application of the licensee, the

Appropriate Commission shall publish the proposed alterations or

modifications with such particulars and in such manner as may

be specified;

(d) the Appropriate Commission shall not make any alterations or

modification unless all suggestions or objections received within

thirty days from the date of the first publication of the notice

have been considered.

19. (1) If the Appropriate Commission, after making an enquiry, is

satisfied that public interest so requires, it may revoke a licence in any of the

following cases, namely: -

(a) where the licensee, in the opinion of the Appropriate Commission,

makes wilful and prolonged default in doing anything required of

him by or under this Act or the rules or regulations made

thereunder;

(b) where the licensee breaks any of the terms or conditions of his

licence the breach of which is expressly declared by such licence

to render it liable to revocation;

(c) where the licensee fails, within the period fixed in this behalf by

his licence, or any longer period which the Appropriate

Commission may have granted therefor

(i) to show, to the satisfaction of the Appropriate Commission,

that he is in a position fully and efficiently to discharge the duties

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15

Sale of utilities

of licensees.

and obligations imposed on him by his licence; or

(ii) to make the deposit or furnish the security, or pay the fees or

other charges required by his licence;

(d) where in the opinion of the Appropriate Commission the financial

position of the licensee is such that he is unable fully and

efficiently to discharge the duties and obligations imposed on him

by his licence.

(2) Where in its opinion the public interest so requires, the

Appropriate Commission may, on application, or with the consent of the licensee,

revoke his licence as to the whole or any part of his area of distribution or

transmission or trading upon such terms and conditions as it thinks fit.

(3) No licence shall be revoked under sub-section (1) unless the

Appropriate Commission has given to the licensee not less than three

monthsnotice, in writing, stating the grounds on which it is proposed to revoke the

licence, and has considered any cause shown by the licensee within the period of

that notice, against the proposed revocation.

(4) The Appropriate Commission may, instead of revoking a licence

under sub-section (1), permit it to remain in force subject to such further terms andconditions as it thinks fit to impose, and any further terms or conditions so imposed

shall be binding upon and be observed by the licensee and shall be of like force and

effect as if they were contained in the licence.

(5) Where the Commission revokes a licence under this section, it

shall serve a notice of revocation upon the licensee and fix a date on which the

revocation shall take effect.

(6) Where an Appropriate Commission has given notice for

revocation of licence under sub-section (5), without prejudice to any penalty which

may be imposed or prosecution proceeding which may be initiated under this Act,

the licensee may, after prior approval of that Commission, sell his utility to any

person who is found eligible by that Commission for grant of licence.

20. (1) Where the Appropriate Commission revokes under section 19 the

licence of any licensee , the following provisions shall apply, namely:-

(a) the Appropriate Commission shall invite applications for

acquiring the utility of the licensee whose licence has been

revoked and determine which of such applications should be

accepted, primarily on the basis of the highest and best price

offered for the utility;

(b) the Appropriate Commission may, by notice in writing, require

the licensee to sell his utility and thereupon the licensee shall sell

his utility to the person (hereafter in this section referred to as

the purchaser) whose application has been accepted by that

Commission;

(c) all the rights, duties, obligations and liabilities of the licensee, on

and from the date of revocation of licence or on and from the

date, if earlier, on which the utility of the licensee is sold to a

purchaser, shall absolutely cease except for any liabilities which

have accrued prior to that date;

(d) the Appropriate Commission may make such interim

arrangements in regard to the operation of the utility as may be

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Vesting ofutility in

purchaser

Provisions whereno purchase takes

place

Directions tolicensees.

Suspension ofdistribution

licence and sale of

utility.

considered appropriate including the appointment of

Administrators;

(e) The Administrator appointed under clause (d) shall exercise such

powers and discharge such functions as the Appropriate

Commission may direct.

(2) Where a utility is sold under sub-section (1), the purchaser shall

pay to the licensee the purchase price of the utility in such manner as may

be agreed upon.

(3) Where the Appropriate Commission issues any notice under sub-

section (1) requiring the licensee to sell the utility, it may, by such notice,

require the licensee to deliver the utility, and thereupon the licensee shall

deliver on a date specified in the notice, the utility to the designated

purchaser on payment of the purchase price thereof.

(4) Where the licensee has delivered the utility referred to in sub-

section(3) to the purchaser but its sale has not been completed by the date

fixed in the notice issued under that sub-section, the Appropriate

Commission may, if it deems fit, permit the intending purchaser to operate

and maintain the utility system pending the completion of the sale.

21. Where a utility is sold under section 20 or section 24, then, uponcompletion of the sale or on the date on which the utility is delivered to the

intending purchaser, as the case may be, whichever is earlier-

(a) the utility shall vest in the purchaser or the intending purchaser,

as the case may be, free from any debt, mortgage or similar

obligation of the licensee or attaching to the utility:

Provided that any such debt, mortgage or similar obligation shall attach to

the purchase money in substitution for the utility; and

(b) the rights, powers, authorities, duties and obligations of the

licensee under his licence shall stand transferred to the purchaser

and such purchaser shall be deemed to be the licensee.

22. (1) If the utility is not sold in the manner provided under section 20 or

section 24, the Appropriate Commission may, to protect the interest of consumers

or in public interest, issue such directions or formulate such scheme as it may deem

necessary for operation of the utility.

(2) Where no directions are issued or scheme is formulated by the Appropriate

Commission under sub-section (1), the licensee referred to in section 20 or section

24 may dispose of the utility in such manner as it may deem fit:

Provided that, if the licensee does not dispose of the utility, within a period

of six months from the date of revocation under section 20 or section 24, the

Appropriate Commission may cause the works of the licensee in, under, over,

along, or across any street or public land to be removed and every such street or

public land to be reinstated, and recover the cost of such removal and reinstatement

from the licensee.

23. If the Appropriate Commission is of the opinion that it is necessary or

expedient so to do for maintaining the efficient supply, securing the equitable

distribution of electricity and promoting competition, it may, by order, provide for

regulating supply, distribution, consumption or use thereof.

24. (1) If at any time the Appropriate Commission is of the opinion that a

distribution licensee

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17

(a) has persistently failed to maintain uninterrupted supply of

electricity conforming to standards regarding quality of

electricity to the consumers; or

(b) is unable to discharge the functions or perform the duties

imposed on it by or under the provisions of this Act; or

(c) has persistently defaulted in complying with any direction

given by the Appropriate Commission under this Act; or

(d) has broken the terms and conditions of licence,

and circumstances exist which render it necessary for it in public interestso to do, the Appropriate Commission may, for reasons to be recorded in writing,

suspend, for a period not exceeding one year, the licence of the distribution licensee

and appoint an Administrator to discharge the functions of the distribution licensee

in accordance with the terms and conditions of licence:

Provided that before suspending a licence under this section, the

Appropriate Commission shall give a reasonable opportunity to the distribution

licensee to make representations against the proposed suspension of license and

shall consider the representations, if any, of the distrbution licensee.

(2) Upon suspension of license under sub-section (1) the utilities of

the distribution licensee shall vest in the Administrator for a period not exceeding

one year or up to the date on which such utility is sold in accordance with the

provisions contained in section 20, whichever is later.

(3) The Appropriate Commission shall, within one year of

appointment of the Administrator under sub-section (1) either revoke the licence

in accordance with the provisions contained in section 19 or revoke suspension of

the licence and restore the utility to the distribution licensee whose licence had

been suspended, as the case may be.

(4) In case where the Appropriate Commission revokes the licence

under sub-section (3), the utility of the distribution licensee shall be sold within a

period of one year from the date of revocation of the licence in accordance with

the provisions of section 20 and the price after deducting the administrative and

other expenses on sale of utilities be remitted to the distribution licensee.

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Inter-State,regional and Inter-

Regional

transmission.

National Load

Despatch Centre.

Constitution of

Regional Load

Despatch Centre.

Functions of

Regional Load

Despatch Centre.

PART- V

TRANSMISSION OF ELECTRICITY

Inter-State transmission

25. For the purposes of this Part, the Central Government may, make region-

wise demarcation of the country, and, from time to time, make such modifications

therein as it may consider necessary for the efficient, economical and integrated

transmission and supply of electricity, and in particular to facilitate voluntary inter-

connections and co-ordination of facilities for the inter-State, regional and inter-regional generation and transmission of electricity.

26. (1) The Central Government may establish a centre at the national

level, to be known as the National Load Despatch Centre for optimum scheduling

and despatch of electricity among the Regional Load Despatch Centres.

(2) The constitution and functions of the National Load Despatch

Centre shall be such as may be prescribed by the Central Government:

Provided that the National Load Despatch Centre shall not engage in the

business of trading in electricity.

(3) The National Load Despatch Centre shall be operated by a

Government company or any authority or corporation established or constitutedby or under any Central Act, as may be notified by the Central Government.

27. (1) The Central Government shall establish a centre for each region

to be known as the Regional Load Despatch Centre having territorial jurisdiction as

determined by the Central Government in accordance with section 25 for the

purposes of exercising the powers and discharging the power and discharging the

functions under this Part.

(2) The Regional Load Despatch Centre shall be operated by a

Government Company or any authority or corporation established or constituted

by or under any Central Act, as may be notified by the Central Government:

Provided that until a Government company or authority or corporation

referred to in this sub-section is notified by the Central Government, the Central

Transmission Utility shall operate the Regional Load Despatch Centre:

Provided further that no Regional Load Despatch Centre shall engage in the

business of generation of electricity or trading in electricity.

28. (1) The Regional Load Despatch Centre shall be the apex body to

ensure integrated operation of the power system in the concerned region.

(2) The Regional Load Despatch Centre shall comply with such

principles, guidelines and methodologies in respect of the wheeling and optimum

scheduling and despatch of electricity as the Central Commission may specify in

the Grid Code.

(3) The Regional Load Despatch Centre shall -

(a) be responsible for optimum scheduling and despatch of

electricity within the region, in accordance with the contracts entered into with the

licensees or the generating companies operating in the region;

(b) monitor grid operations;

(c) keep accounts of the quantity of electricity transmitted through

the regional grid;

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Compliance of

directions.

Transmission

within a State

Constitution of

State LoadDespatch

Centres

(d) exercise supervision and control over the inter-State transmission

system; and

(e) be responsible for carrying out real time operations for grid

control and despatch of electricity within the region through secure and economic

operation of the regional grid in accordance with the Grid Standards and the Grid

Code.

(4) The Regional Load Despatch Centre may levy and collect such

fee and charges from the generating companies or licensees engaged in inter-Statetransmission of electricity as may be specified by the Central Commission.

29. (1) The Regional Load Despatch Centre may give such directions

and exercise such supervision and control as may be required for ensuring stability

of grid operations and for achieving the maximum economy and efficiency in the

operation of the power system in the region under its control.

(2) Every licensee, generating company, generating station, sub-

station and any other person connected with the operation of the power system shall

comply with the direction issued by the Regional Load Despatch Centres under

sub-section (1).

(3) All directions issued by the Regional Load Despatch Centres to

any transmission licensee of State transmission lines or any other licensee of theState or generating company (other than those connected to inter State transmission

system) or sub-station in the State shall be issued through the State Load Despatch

Centre and the State Load Despatch Centres shall ensure that such directions are

duly complied with the licensee or generating company or sub-station.

(4) The Regional Power Committee in the region may, from time to

time, agree on matters concerning the stability and smooth operation of the

integrated grid and economy and efficiency in the operation of the power system in

that region.

(5) If any dispute arises with reference to the quality of electricity or

safe, secure and integrated operation of the regional grid or in relation to any

direction given under sub-section (1), it shall be referred to the Central

Commission for decision :

Provided that pending the decision of the Central Commission, the

directions of the Regional Load Despatch Centre shall be complied with by the

State Load Despatch Centre or the licensee or the generating company, as the case

may be.

(6) If any licensee, generating company or any other person fails to

comply with the directions issued under sub-section (2) or sub-section (3), he

shall be liable to penalty not exceeding rupees fifteen lacs.

Intra-State transmission

30. The State Commission shall facilitate and promote transmission, wheeling

and inter-connection arrangements within its territorial jurisdiction for the

transmission and supply of electricity by economical and efficient utilisation of the

electricity.

31. (1) The State Government shall establish a Centre to be known as the

State Load Despatch Centre for the purposes of exercising the powers and

discharging the functions under this Part.

(2) The State Load Despatch Centre shall be operated by a

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Functions of StateLoad DespatchCentres

Compliance ofdirections

Government company or any authority or corporation established or constituted

by or under any State Act, as may be notified by the State Government.

Provided that until a Government company or any authority or

corporation is notified by the State Government, the State Transmission Utility

shall operate the State Load Despatch Centre:

Provided further that no State Load Despatch Centre shall engage in the

business of trading in electricity.

32. (1) The State Load Despatch Centre shall be the apex body to ensure

integrated operation of the power system in a State.

(2) The State Load Despatch Centre shall -

(a) be responsible for optimum scheduling and despatch of electricity

within a State, in accordance with the contracts entered into with the licensees or

the generating companies operating in that State;

(b) monitor grid operations;

(c) keep accounts of the quantity of electricity transmitted through

the State grid;

(d) exercise supervision and control over the intra-state transmission

system; and

(e) be responsible for carrying out real time operations for grid

control and despatch of electricity within the State through secure and economic

operation of the State grid in accordance with the Grid Standards and the State Grid

Code.

(3) The State Load Despatch Centre may levy and collect such fee

and charges from the generating companies and licensees engaged in intra-State

transmission of electricity as may be specified by the State Commission.

33. (1) The State Load Despatch Centre in a State may give such

directions and exercise such supervision and control as may be required forensuring the integrated grid operations and for achieving the maximum economy

and efficiency in the operation of power system in that State.

(2) Every licensee, generating company, generating station, sub-

station and any other person connected with the operation of the power system shall

comply with the direction issued by the State Load Depatch Centre under sub-

section (1).

(3) The State Load Despatch Centre shall comply with the directions

of the Regional Load Despatch Centre.

(4) If any dispute arises with reference to the quality of electricity or

safe, secure and integrated operation of the State grid or in relation to any direction

given under sub-section (1) , it shall be referred to the State Commission fordecision:

Provided that pending the decision of the State Commission, the direction

of the State Load Despatch Centre shall be complied with by the licensee or

generating company.

(5) If any licensee, generating company or any other person fails to

comply with the directions issued under sub-section(1), he shall be liable to

penalty not exceeding rupees five lacs.

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21

Grid Standards

Intervening

transmission

facilities.

Charges for

intervening

transmission

facilities.

Direction by

appropriateGovernment.

CentralTransmission

Utility and

functions.

1 of 1956

Other provisions relating to transmission

34. Every transmission licensee shall comply with such technical standards,

of operation and maintenance of transmission lines, in accordance with the Grid

Standards, as may be specified by the Authority.

35. The Appropriate Commission may, on an application by any licensee, by

order require any other licensee owning or operating intervening transmission

facilities to provide the use of such facilities to the extent of surplus capacityavailable with such licensee.

Provided that any dispute regarding the extent of surplus capacity

available with the licensee, shall be adjudicated upon by the Appropriate

Commission.

36. (1) Every licensee shall, on an order made under section 35,

provided his intervening transmission facilities at rates, charges and terms and

conditions as may be mutually agreed upon :

Provided that the Appropriate Commission may specify rates, charges

and terms and conditions if these cannot be mutually agreed upon by the licensees.

(2) The rates, charges and terms and conditions referred to in sub-section (1) shall be fair and reasonable, and may be allocated in proportion to the

use of such facilities.

Explanation. - For the purposes of section 35 and 36, the expression

intervening transmission facilities means the electric lines owned or operated

by a licensee where such electric lines can be utilised for transmitting electricity

for and on behalf of another licensee at his request and on payment of a tariff or

charge.

37. The Appropriate Government may issue directions to the Regional Load

Despatch Centres or State Load Despatch Centres, as the case may be, to take such

measures as may be necessary for maintaining smooth and stable transmission and

supply of electricity to any region or State.

38. (1) The Central Government may notify any Government company

as the Central Transmission Utility:

Provided that the Central Transmission Utility shall not engage in the

business of generation of electricity or trading in electricity:

Provided further that, the Central Government may transfer, and vest any

property, interest in property, rights and liabilities connected with, and personnel

involved in transmission of electricity of such Central Transmission Utility, to a

company or companies to be incorporated under the Companies Act, 1956 to

function as a transmission licensee, through a transfer scheme to be effected in the

manner specified under Part XIII and such company or companies shall be deemed

to be transmission licensees under this Act.

(2) The functions of the Central Transmission Utility shall be -

(a) to undertake transmission of electricity through inter-State

transmission system;

(b) to discharge all functions of planning and co-ordination relating

to inter-state transmission system with -

(i) State Transmission Utilities;

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State

Transmission

Utility andfunctions

(ii) Central Government;

(iii) State Governments;

(iv) generating companies;

(v) Regional Power Committees;

(vi) Authority;

(vii) licensees;

(viii) any other person notified by the Central Government in

this behalf;

(c) to ensure development of an efficient, co-ordinated and

economical system of inter-State transmission lines for smooth flow of electricity

from generating stations to the load centres;

(d) to provide non-discriminatory open access to its transmission

system for use by-

(i) any licensee or generating company on payment of thetransmission charges; or

(ii) any consumer as and when such open access is provided by the

State Commission under sub-section (2) of section 42, on payment of the

transmission charges and a surcharge thereon, as may be specified by the Central

Commission:

Provided that such surcharge shall be utilised for the purpose of meeting

the requirement of current level cross-subsidy:

Provided further that such surcharge and cross subsidies shall be

progressively reduced and eliminated in the manner as may be specified by the

Central Commission:

Provided also that such surcharge may be levied till such time the cross

subsidies are not eliminated:

Provided also that the manner of payment and utilisation of the

surcharge shall be specified by the Central Commission:

Provided also that such surcharge shall not be leviable in case open

access is provided to a person who has established a captive generating plant

for carrying the electricity to the destination of his own use.

39. (1) The State Government may notify the Board or a Government

company as the State Transmission Utility:

Provided that the State Transmission Utility shall not engage in the business

of trading in electricity:

Provided further that the State Government may transfer, and vest any

property, interest in property, rights and liabilities connected with, and personnel

involved in transmission of electricity, of such State Transmission Utility, to a

company or companies to be incorporated under the Companies Act, 1956 to

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Duties ofTransmission

licensees

function as transmission licensee through a transfer scheme to be effected in the

manner specified under Part XIII and such company or companies shall be deemed

to be transmission licensees under this Act.

(2) The functions of the State Transmission Utility shall be -

(a) to undertake transmission of electricity through intra-State

transmission system;

(b) to discharge all functions of planning and co-ordination relating tointra-state transmission system with -

(i) Central Transmission Utility;

(ii) State Governments;

(iii) generating companies;

(iv) Regional Power Committees;

(v) Authority;

(vi) licensees;

(vii) any other person notified by the State Government in this

behalf;

(c) to ensure development of an efficient, co-ordinated and

economical system of intra-State transmission lines for smooth flow of electricity

from a generating station to the load centres;

(d) to provid non-discriminatory open access to its transmission

system for use by-

(i) any licensee or generating company on payment of the

transmission charges ; or

(ii) any consumer as and when such open access is provided by the

State Commission under sub-section (2) of section 42, on payment of the

transmission charges and a surcharge thereon, as may be specified by the State

Commission:

Provided that such surcharge shall be utilised for the purpose of meeting

the requirement of current level cross-subsidy:

Provided further that such surcharge and cross subsidies shall be

progressively reduced and eliminated in the manner as may be specified by the

State Commission:

Provided also that such surcharge may be levied till such time the cross

subsidies are not eliminated:

Provided also that the manner of payment and utilisation of the

surcharge shall be specified by the State Commission.

Provided also that such surcharge shall not be leviable in case open

access is provided to a person who has established a captive generating plant for

carrying the electricity to the destination of his own use.

40. It shall be the duty of a transmission licensee -

(a) to build, maintain and operate an efficient, co-ordinated and

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Other business of

TransmissionLicensee

economical inter-State transmission system or intra-State transmission

system, as the case may be;

(b) to comply with the directions of the Regional Load Despatch

Centre and the State Load Despatch Centre as the may be;.

(c) to provide non-discriminatory open access to its transmission

system for use by-

(i) any licensee or generating company on payment of thetransmission charges; or

(ii) any consumer as and when such open access is provided by the

State Commission under sub-section (2) of section 42, on payment of the

transmission charges and a surcharge thereon, as may be specified by the State

Commission:

Provided that such surcharge shall be utilised for the purpose of meeting

the requirement of current level cross-subsidy:

Provided further that such surcharge and cross subsidies shall be

progressively reduced and eliminated in the manner as may be specified by the

Appropriate Commission:

Provided also that such surcharge may be levied till such time the cross

subsidies are not eliminated:

Provided also that the manner of payment and utilisation of the

surcharge shall be specified by the Appropriate Commission:

Provided also that such surcharge shall not be leviable in case open

access is provided to a person who has established a captive generating plant for

carrying the electricity to the destination of his own use.

41. A transmission licensee may, with prior intimation to the Appropriate

Commission , engage in any business for optimum utilisation of its assets:

Provided that a proportion of the revenues derived from such business

shall, as may be specified by the Appropriate Commission, be utilised for reducing

its charges for transmission and wheeling:

Provided further that the transmission licensee shall maintain separate

accounts for each such business undertaking to ensure that transmission business

neither subsidies in any way such business undertaking nor encumbers its

transmission assets in any way to support such business:

Provided also that no transmission licensee shall enter into any contract

or otherwise engage in the business to in trading electricity :

Duties of

distribution

Licensee and

open access

PART VI

DISTRIBUTION OF ELECTRICITY

Provisions with respect to distribution licensees

42. .(1) It shall be the duty of a distribution licensee to develop and maintain an

efficient, co-ordinated and economical distribution system in his area of supply and

to supply electricity in accordance with the provisions contained in this Act.

(2) The State Commission shall introduce open access in such phases and

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subject to such conditions, (including the cross subsidies, and other operational

constraints) as may be specified within one year of the appointed date by it and in

specifying the extent of open access in successive phases and in determining the

charges for wheeling, it shall have due regard to all relevant factors including such

cross subsidies, and other operational constraints:

Provided that such open access may be allowed before the cross subsidies

are eliminated on payment of a surcharge in addition to the charges for wheeling as

may be determined by the State Commission :

Provided further that such surcharge shall be utilised to meet the

requirements of current level of cross subsidy within the area of supply of the

distribution licensee :

Provided also that such surcharge and cross subsidies shall be

progressively reduced and eliminated in the manner as may be specified by the

State Commission:

Provided also that such surcharge shall not be leviable in case open access

is provided to a person who has established a captive generating plant for carrying

the electricity to the destination of his own use.

(3) Where any person, whose premises are situated within the area of

supply of a distribution licensee, (not being a local authority engaged in thebusiness of distribution of electricity before the appointed date) requires a supply of

electricity from a generating company or any licensee other than such distribution

licensee, such person may, by notice, require the distribution licensee for wheeling

such electricity in accordance with regulations made by the State Commission and

the duties of the distribution licensee with respect to such supply shall be of a

common carrier providing non-discriminatory open access .

(4) Where the State Commission permits a consumer or class of

consumers to receive supply of electricity from a person other than the distribution

licensee of his area of supply, such consumer shall be liable to pay an additional

surcharge on the charges of wheeling, as may be specified by the State

Commission, to meet the fixed cost of such distribution licensee arising out of his

obligation to supply.

(5) Every distribution licensee shall, within six months from the appointed

date or date of grant of licence, whichever is earlier, establish a forum for redressal

of grievances of the consumers in accordance with the guidelines as may be

specified by the State Commission.

(6) Any consumer, who is aggrieved by non-redressal of his grievances

under sub-section (5), may make a representation for the redressal of his grievance

to an authority to be known as Ombudsman to be appointed or designated by the

State Commission.

(7) The Ombudsman shall settle the grievance of the consumer within such

time and in such manner as may be specified by the State Commission.

(8) The provisions of sub-sections (5),(6) and (7) shall be without

prejudice to right which the consumer may have apart from the rights conferred

upon him by those sub-sections.

Duty to supply on

request43. (1) Every distribution licensee, shall, on an application by the owner

or occupier of any premises, give supply of electricity to such premises, within

one month after receipt of the application requiring such supply :

Provided that where such supply requires extension of distribution

mains, or commissioning of new sub-stations, the distribution licensee shall

supply the electricity to such premises immediately after such extension or

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commissioning or within such period as may be specified by the Appropriate

Commission.

Provided further that in case of a village or hamlet or area wherein no

provision for supply of electricity exists, the Appropriate Commission may extend

the said period as it may consider necessary for electrification of such village or

hamlet or area.

(2) It shall be the duty of every distribution licensee to provide, if

required, electric plant or electric line for giving electric supply to the premisesspecified in sub-section (1) :

Provided that no person shall be entitled to demand, or to continue to

receive, from a licensee a supply of electricity for any premises having a separate

supply unless he has agreed with the licensee to pay to him such price as

determined by the Appropriate Commission .

(3) If a distribution licensee fails to supply the electricity within the

period specified in sub-section (1), he shall be liable to a penalty which may

extend to one thousand rupees for each day of default.

Exceptions from

duty to supply

electricity.

44. Nothing contained in section 43 shall be taken as requiring a distribution

licensee to give supply of electricity to any premises if he is prevented from doing

so by cyclone, floods, storms or other occurrences beyond his control.

Power to recover

charges45. (1) Subject to the provisions of this section, the prices to be charged

by a distribution licensee for the supply of electricity by him in pursuance of

section 43 shall be in accordance with such tariffs fixed from time to time and

conditions of his licence.

(2) The charges for electricity supplied by a distribution licensee

shall be -

(a) fixed in accordance with the methods and the principles as may

be specified by the concerned State Commission ;

(b) published in such manner so as to give adequate publicity for

such charges and prices.

(3) The charges for electricity supplied by a distribution licensee

may include -

(a) a fixed charge in addition to the charge for the actual electricity

supplied;

(b) a rent or other charges in respect of any electric meter or

electrical plant provided by the distribution licensee.

(4) Subject to the provisions of section 62, in fixing charges under

this section a distribution licensee shall not show undue preference to any person or

class of persons or discrimination against any person or class of persons.

(5) The charges fixed by the distribution licensee shall be in

accordance with the provisions of this Act and the regulations made in this behalf

by the concerned State Commission.

Power to recover

expenditure46. The State Commission may, by regulations, authorise a distribution

licensee to charge from a person requiring a supply of electricity in pursuance of

section 43 any expenses reasonably incurred in providing any electric line or

electrical plant used for the purpose of giving that supply.

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Power to require

security.47. (1) Subject to the provisions of this section, a distribution licensee

may require any person, who requires a supply of electricity in pursuance of section

43, to give him reasonable security, as determined by regulations, for the payment

to him of all monies which may become due to him -

(a) in respect of the electricity supplied to such persons; or

(b) where any electric line or electrical plant or electric meter is to beprovided for supplying electricity to person, in respect of the provision of such

line or plant or meter,

and if that person fails to give such security, the distribution licensee may, if he

thinks fit, refuse to give the supply or to provide the line or plant or meter for the

period during which the failure continues.

(2) Where any person has not given such security as is mentioned in

subsection (1) or the security given by any person has become invalid or

insufficient, the distribution licensee may, by notice, require that person, within

thirty days after the service of the notice, to give him reasonable security for the

payment of all monies which may become due to him in respect of the supply of

electricity or provision of such line or plant or meter.

(3) If the person referred to in sub-section(2) fails to give such

security, the distribution licensee may, if he thinks fit, discontinue the supply of

electricity for the period during which the failure continues.

(4) The distribution licensee shall pay interest equivalent to the bank

rate or more, as may be specified by the concerned State Commission, on the

security referred to in sub-section (1) and refund such security on the request of the

person who gave such security.

(5) A distribution licensee shall not be entitled to require security in

pursuance of clause (a) of sub-section (1) if the person requiring the supply is

prepared to take the supply through a pre-payment meter.

Additional termsof supply. 48. A distribution licensee may require any person who requires a supply ofelectricity in pursuance of section 43 to accept -

(a) any restrictions which may be imposed for the purpose of

enabling the distribution licensee to comply with regulations made under section

53;

(b) any terms restricting any liability of the distribution licensee for

economic loss resulting from negligence of the person to whom the electricity is

supplied.

Agreements with

respect to supplyor purchase of

electricity.

49. Where the Appropriate Commission has allowed open access to certain

consumers under section 42, such consumers notwithstanding the provisionscontained in clause (d) of sub-section (1) of section 62, may enter into an

agreement with any person for supply or purchase of electricity on such terms and

conditions (including tariff) as may be agreed upon by them.

The ElectricitySupply Code.

50. The State Commission shall specify an Electricity Supply Code to providefor recovery of electricity charges, intervals for billing of electricity charges

disconnection of supply of electricity for non-payment thereof; restoration of

supply of electricity; tampering, distress or damage to electrical plant, electric lines

or meter, entry of distribution licensee or any person acting on his behalf for

disconnecting supply and removing the meter; entry for replacing, altering or

maintaining electric lines or electrical plant or meter.

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Other businessesof distribution

licensees.

51. (1) A distribution licensee may, with prior intimation to the

Appropriate Commission, engage in any other business for optimum utilisation

of its assets:

Provided that a proportion of the revenues derived from such business

shall, as may be specified by the concerned State Commission, be utilised for

reducing its charges for wheeling :

Provided further that the distribution licensee shall maintain separate

accounts for each such business undertaking to ensure that distribution businessneither subsidies in any way such business undertaking nor encumbers its

distribution assets in any way to support such business.

Provided also that nothing contained in this section shall apply to a local

authority engaged, before the commencement of this Act, in the business of

distribution of electricity.

Provisions withrespect to

electricity trader.

Provisions with respect to electricity traders

52. (1) Without prejudice to the provisions contained in clause (c) of

section 12, the Appropriate Commission may, specify the technical requirement,

capital adequacy requirement and credit worthiness for being an electricity trader.

(2) Every electricity trader shall discharge such duties, in relation to

supply and trading in electricity, as may be specified by the Appropriate

Commission.

.

Provisions relating

to safety and

electricity supply

Provisions with respect to supply generally

53. (1) The Authority may in consultation with the State Government,

specify suitable measures for

(a) protecting the public (including the persons engaged in thegeneration, transmission or distribution or trading) from dangers arising from the

generation, transmission or distribution or trading of electricity, or use ofelectricity supplied or installation, maintenance or use of any electric line or

electrical plant;

(b) eliminating or reducing the risks of personal injury to any

person, or damage to property of any person or interference with use of such

property ;

(c) prohibiting the supply or transmission of electricity except by

means of a system which conforms to the specification as may be specified;

(d) giving notice in the specified form to the Appropriate

Commission and the Electrical Inspector, of accidents and failures of supplies or

transmissions of electricity;

(e) keeping by a generating company or licensee the maps, plans

and sections relating to supply or transmission of electricity;

(f) inspection of maps, plans and sections by any person authorised

by it or by Electrical Inspector or by any person on payment of specified fee;

(g) specifying action to be taken in relation to any electric line or

electrical plant, or any electrical appliance under the control of a consumer for the

purpose of eliminating or reducing a risk of personal injury or damage to property

or interference with its use;

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Control of

transmission and

use of electricity

54. (1) Save as otherwise exempted under this Act, no person other

than Central Transmission Utility or a State Transmission Utility, or a licensee

shall transmit or use electricity at a rate exceeding two hundred and fifty watts and

one hundred volts

(a) in any street, or

(b) in any place,-

(i) in which one hundred or more persons are ordinarily likely to be

assembled; or

(ii) which is a factory within the meaning of the Factories Act, 1948

or a mine within the meaning of the Mines Act, 1952; or

(iii) to which the State Government, by general or special order,

declares the provisions of this sub-section to apply,

without giving, before the commencement of transmission or use of

electricity, not less than seven days notice in writing of his intention to the

Electrical Inspector and to the District Magistrate, or the Commissioner of Police,

as the case may be, containing particulars of the electrical installation and plant, if

any, the nature and the purpose of supply and complying with such of theprovisions of Part XI of this Act, as may be applicable:

Provided that nothing in this section shall apply to electricity used for

the public carriage of passengers, animals or goods, on, or for the lighting or

ventilation of the rolling stock of any railway or tramway subject to the

provisions of the Railways Act, 1989.

(2) Where any difference or dispute arises as to whether a place is

or is not one in which one hundred or more persons are ordinarily likely to be

assembled, the matter shall be referred to the State Government, and the decision

of the State Government thereon shall be final.

(3) The provisions of this section shall be binding on the

Government.

55. (1) No licensee shall supply electricity, after the expiry of two years from the

appointed date, except through installation of a correct meter in accordance with

regulations to be made in this behalf by the Authority:

Provided that the licensee may require the consumer to give him security

for the price of a meter and enter into an agreement for the hire thereof, unless the

consumer elects to purchase a meter:

Provided further that the State Commission may, by notification extend

the said period of two years for a class or classes of persons or for such area as may

be specified in that notification.

(2) For proper accounting and audit in the generation, transmission

and distribution or trading of electricity, the Authority may direct the installation of

meters by a generating company or licensee at such stages of generation,

transmission or distribution or trading of electricity and at such locations of

generation, transmission or distribution or trading , as it may deem necessary.

(3) If a person makes default in complying with the provisions contained in

this section or regulations made under sub-section (1), the Appropriate Commission

may make such order as it thinks fit for requiring the default to be made good by

the generating company or licensee or by any officers of a company or other

association or any other person who is responsible for its default.

63 of 1948.

35 of 1952.

24 of 1989

Use, etc., of

meters

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Disconnection of

supply in default

of payment.

56. (1) Where any person neglects to pay any charge for electricity or

any sum other than a charge for electricity due from him to a licensee or the

generating company in respect of supply, transmission or distribution or wheeling

of electricity to him, the licensee or the generating company may, after giving not

less than fifteen clear days notice in writing, to such person and without prejudice

to his rights to recover such charge or other sum by suit, cut off the supply of

electricity and for that purpose cut or disconnect any electric supply line or other

works being the property of such licensee or the generating company through which

electricity may have been supplied, transmitted, distributed or wheeled and maydiscontinue the supply until such charge or other sum, together with any expenses

incurred by him in cutting off and reconnecting the supply, are paid, but no longer:

Provided that the supply of electricity shall not be cut off if such

person deposits , under protest, -

(a) an amount equal to the sum claimed from him, or